Twitter icon Email alerts icon Latest News RSS icon Magazine icon Stay connected:

View the article online at

Stout blasts industry 'short termism' as he buys EM

by Eleanor Lawrie on May 30, 2014 at 15:00

Stout blasts industry 'short termism' as he buys EM

Bruce Stout’s shareholders have stood by him during his first year of under-performance since taking over the £1.3 billion Murray International investment trust a decade ago, after it was harmed by emerging market turmoil.

Managed by Stout (pictured) since 2004, Murray International's share price total return has fallen by 8.5% in the year to April, trailing the benchmark (composed of 40% FTSE World UK and 60% FTSE World ex UK), which made a 7.7% gain.

Over five years, the trust is still up 102.1% versus a benchmark return of 88.5%, however.

Stout said he was not fazed by the short term dip, which he said was down to the relative underperformance of emerging markets compared with developed regions in 2013.

‘The poor relative performance is because developed markets have done so well – the US is up 30%, UK up 22%, Europe up 25% – but it’s just price-to-earnings expansion,’ he said.

‘Last year, during the relative underperformance of Murray International, there were many companies we owned who did exactly what we expected so in absolute performance there was no money lost, but the share price did not do anything, so from a market perspective it was disproportionate,’ he said.

‘But that does not mean you should change your process, because these periods happen.’

A consistently strong pound has also cost performance. ‘For the last five years, the relentless rise in sterling, which is now close to a five-year high, has been a drag on absolute performance because 87% of our assets are outside of the UK, so that has been a headwind. But currencies don’t go in a straight line forever,’ Stout said.

Industry’s fickleness

The manager is also scathing of the financial services industry’s focus on short term achievements.

‘Fund management is like football, you’re only as good as your last quarter. People are all long term until you underperform, then they are all short term. Our shareholders are mainly retail and understand the trust and the majority are in for the long term. The shareholder base is strong, but the industry can look very short term,’ he said.

Sign in / register to view full article on one page

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Sponsored Video: Bringing it all back home

As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

Sponsored Video: Barings on investing in Frontier Markets

From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.

More about this:

Look up the shares

Look up the fund managers

  • Bruce Stout
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them


On the road

Click here to find out more from the Audience Development team.

Sorry, this link is not
quite ready yet